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Operating revenues were $5.0 billion for the third quarter, a decrease of approximately $0.8 billion compared with the same period last year. For the first nine months of 2020, operating revenues were $14.7 billion, a decline of about $2.4 billion (14.0%) vs. the corresponding 2019 period. These results reflect “lower volumes of 8.3% in the third quarter and 10.5% in the first nine months, as well as a 4.0% year-to-date decrease in average revenue per car/unit resulting from business mix changes and lower fuel surcharge revenue driven by lower fuel prices,” according to BNSF parent company Berkshire Hathaway’s recently filed third-quarter report.
The company noted: “While monthly volumes improved sequentially in the third quarter of 2020, volumes continued to be negatively affected by the pandemic.”
Pre-tax earnings were $1.8 billion for the third quarter, a decline of 8.4% compared with the same period last year; for the first nine months, they were $4.9 billion, a drop of 9.7%, compared with the 2019 period. The decreases, according to the filing, “principally resulted from the negative impacts of the COVID-19 pandemic on volumes.”
Railroad operating expenses were $3.0 billion in the third quarter and $9.1 billion in the first nine months of 2020, falling $0.7 billion (18.0%) and $2.0 billion (18.0%), respectively, compared with the same 2019 periods. The ratio of railroad operating expenses to railroad operating revenues decreased 2.9 percentage points to 59.7% in the third quarter and 3.0 percentage points to 62.1% in the first nine months of 2020 vs. the 2019 periods. According to the filing, “Railroad operating expenses in 2020 reflected lower volume-related costs, productivity improvements, the effects of cost control initiatives and the effects of improved weather conditions compared to 2019.”
While the pandemic has caused “significant economic disruptions that adversely affected the demand for transportation services,” the company reported, “We believe BNSF’s fundamental business remains strong and it has ample liquidity to continue business operations during this volatile period.”
The post BNSF 3Q20: Pandemic Drives Down Revenues, Pre-Tax Earnings appeared first on Railway Age.
This article first appeared on www.railwayage.com
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